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Nelly Group — Interim / Quarterly Report 2013
Oct 21, 2013
3179_10-q_2013-10-21_c5abc310-923b-49bd-b535-73023d92537f.pdf
Interim / Quarterly Report
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Interim report for 1 January – 30 September 2013
CDON Group AB (NASDAQ OMX Stockholm Mid Cap: CDON) announces its financial results for the third quarter and first nine months of 2013.
Third quarter
- Net sales reached SEK 949.6 million. Previous year SEK 953.3 million excluding divested operations and SEK 982.5 million including divested operations
- Gross margin of 12.3%. Previous year 13.6% excluding non-recurring items and divested operations
- Operating profit of SEK -17.9 million. Previous year SEK 2.6 million excluding non-recurring items and divested operations and SEK -7.6 million including non-recurring items and divested operations
- Profit after tax amounted to SEK -21.1 (-11.3) million
- Earnings per share amounted to SEK -0.21 (-0.16)
First nine months
- Net sales excluding divested operations was up 4.6% to SEK 2,946.2 (2,817.6) million
- Net sales including divested operations was up 2.8% to SEK 2,969.9 (2,888.9) million
- Gross margin of 12.8% (12.9%), which corresponds to 14.0% (14.7%) excluding non-recurring items and divested operations
- Operating profit of SEK -28.4 (10.0) million excluding non-recurring items and divested operations
- Operating profit of SEK -74.6 (-63.2) million including non-recurring items and divested operations
- Profit after tax amounted to SEK -83.1 (-61.4) million
- Earnings per share amounted to SEK -1.03 (-0.88)
CEO's statement
Paul Fischbein, CEO and President, commented: "CDON Group reports a solid sales growth for three out of four segments during the quarter. Particularly, the Sports & Health segment displays a continued strong growth of 37% with stable profitability while sales within the Fashion segment increased by over 14%. Also, the Home & Garden segment continued to grow in the quarter.
The inventory reduction of computer products continued within CDON.com, which affected results negatively by approximately SEK 13 million during the quarter. Consequently, the Entertainment segment showed an underlying operating profit during the period. Our ambition is to transform CDON.com into a full range retailer online and we continue to deliver on our strategy to defend our market leading position and to continuously broaden our product offering.
The efficiency enhancing initiatives within the Fashion segment continued and a new web platform was launched. As of the end of the third quarter, the majority of the internal reinforcement and restructuring measures had been completed within Nelly.com. Despite a strong focus on these efficiency enhancing measures and a market which was weakened somewhat by the warm weather, the Fashion segment grew by over 14%.
Profitability for our fastest growing segment, the Sports & Health segment, showed continued strength with an operating margin of approximately 9% despite continued investments in new markets. Private label products accounted for 46% of total sales and an entirely new product category was launched. Total sales growth within the Sports & Health segment amounted to 37%."
Forward-looking statement
CDON Group's strategy for 2013 is to continue to deliver sales growth and increased market shares in a balanced way, particularly in Nelly.com and Gymgrossisten.com. CDON.com is expected to weaken the Group's growth as media products sales are expected to decline. The continued inventory reduction within CDON.com is expected to affect the Entertainment segment's result due to continued lower margins in the fourth quarter. The Group's logistics company CDON Group Logistics AB is expected to show breakeven figures as of the fourth quarter.
Significant events during the third quarter 2013
The acquisition of all outstanding minority shares in Nelly.com
On 8 July, CDON Group AB announced that it had acquired the 2.23% of shares outstanding in its subsidiary NLY Scandinavia AB ("Nelly.com") from the company's minority shareholders. CDON Group now holds 100.0% of shares and votes in NLY Scandinavia AB.
| (SEK million) | 2013 Jul-Sep |
2012 Jul-Sep |
Change (%) | 2013 Jan-Sep |
2012 Jan-Sep |
Change (%) |
|---|---|---|---|---|---|---|
| Net sales | 949.6 | 953.3 | -0.4% | 2,946.2 | 2,817.6 | 4.6% |
| Gross profit | 117.0 | 129.5 | -9.6% | 413.8 | 413.7 | 0.0% |
| Gross margin (%) | 12.3% | 13.6% | 14.0% | 14.7% | ||
| Operating profit | -17.9 | 2.6 | - | -28.4 | 10.0 | - |
| Operating margin (%) | -1.9% | 0.3% | -1.0% | 0.4% | ||
| Ingoing inventory balance |
545.0 | 504.3 | 575.7 | 438.8 | ||
| Closing inventory balance |
569.5 | 642.0 | -11.3% | 569.5 | 642.0 | -11.3% |
The Group's financial summary, excluding divested entities and non-recurring costs*
*Divested entities and non-recurring costs are reported on page 4
Earnings summary
Consolidated net sales excluding divested operations decreased by 0.4% in the third quarter but increased by 4.6% for the first nine months. Excluding currency effects and divested operations Group sales increased by 0.3% in the quarter and by 5.6% for the first nine months. The Sports & Health and Fashion segments reported continued strong sales growth and increased market shares in the quarter. The Group's online stores attracted 52.3 (53.3) million visitors and generated 1.5 (1.6) million orders in the quarter.
The consolidated gross margin for the Group was 12.3% (13.6%) for the quarter excluding non-recurring items and divested operations, and 14.0% (14.7%) for the first nine months. The decreased margin in the quarter is primarily attributable to CDON.com, that performed clearance sales for computer-related products that contributed negatively with approximately SEK 13 million to earnings and the smaller portion of sales from media-related products which affected gross margin negatively.
The Group's operating result excluding non-recurring items and divested operations was SEK -17.9 (2.6) million for the quarter and -28.4 (10.0) million for the first nine months. Including non-recurring items and divested operations, operating profit totalled SEK -17.9 (-7.6) million for the quarter and SEK -74.6 (-63.2) million for the first nine months.
Consolidated net financial expenses totalled SEK -6.3 (-8.8) million for the quarter, which primarily reflected interest expenses related to the Group's convertible bond and foreign currency effects. For the first nine
months net financial expenses totalled SEK -28.0 (-19.2) million which also included interest costs for the credit and overdraft facilities.
Consolidated earnings before tax totalled SEK -24.3 (-16.4) million for the quarter and SEK -102.6 (-82.4) million for the first nine months. The Group recognized tax revenues of SEK 3.2 (5.1) million for the quarter and SEK 19.5 (21.0) million for the first nine months as a result of capitalized loss carry forwards. Group profit after tax therefore totalled SEK -21.1 (-11.3) million for the third quarter and SEK -83.1 (-61.4) million for the first nine months.
Consolidated earnings per share before and after dilution totalled SEK -0.21 (-0.16) for the third quarter and SEK -1.03 (-0.88) for the first nine months.
Cash flow and financial position
The Group showed cash flow from operations of SEK -15.2 (1.2) million in the quarter and SEK -83.6 (-81.7) million for the first nine months. The cash flow effect from changes in working capital amounted to SEK 29.8 (-93.6) million in the quarter and SEK -193.0 (-291.2) million for the first nine months. The changes compared to last year are mainly due to less working capital tied up in inventory. Consolidated cash flow from operations therefore totalled SEK 14.6 (-92.4) million in the quarter and SEK -276.6 (-372.9) million for the first nine months.
Consolidated cash flow to investing activities totalled SEK -11.4 (-6.1) million in the quarter and SEK -21.3 (-32.7) million for the first nine months. Primarily, the cash flow in the third quarter was affected by operational investments, mainly relating to the development of the Group's store platforms and logistics operations.
Consolidated cash flow to financing activities in the quarter amounted to SEK -166.2 (0.0) million and SEK 336.0 (0.0) million for the first nine months. During the quarter the Group amortized SEK 150 million on existing credit facilities and acquired all outstanding minority shares in NLY Scandinavia AB. The nine months period reflects the rights issue from the second quarter and the restructuring of the Group's long term debt.
Consolidated cash and cash equivalents declined by SEK 163.0 million in the quarter. Including translation differences, cash and cash equivalents decreased to SEK 163.8 (9.0) million from SEK 327.2 million at the end of the second quarter. For the first nine months cash and cash equivalents increased by SEK 38.2 (-405.7) million.
At the end of the period the Group had a net debt of SEK 65.6 (361.9) million compared to SEK 50.0 million at the end of the second quarter and SEK 246.8 million at the end of 2012. The increase in the quarter mainly reflected investments made in investing and financing activities, whilst the reduction year to date reflects the rights issue and the restructuring of the Group's long-term debt.
Total consolidated assets grew by 10% year on year to SEK 1,627.4 (1,482.3) million. Stock levels increased by SEK 19 million during the quarter to SEK 569.5 (682.9) million compared to an increase of SEK 150.3 million for the same period last year. Capital employed totalled SEK 738.9 million. The Group's rolling 12 months return on capital employed declined year on year and was negative, which is mainly explained by deteriorated earnings during the fourth quarter of 2012.
Consolidated equity decreased to SEK 673.3 (354.5) million in the quarter compared to SEK 707.4 million at the end of the second quarter. The decrease in the quarter is primarily attributable to the quarter's results as well as the acquisition of the remaining minority stake in NLY Scandinavia AB. Consolidated equity increased from SEK 266.4 million at the beginning of the year, primarily attributable to the second quarter rights issue which was partly offset by net income and the acquisition of the minority stake.
Summary of divested operations and non-recurring items
| SUMMARY OF DIVESTED ENTITIES | 2012 | 2012 | 2012 | 2012 | 2012 | 2012 | 2013 | 2013 | 2013 | 2013 |
|---|---|---|---|---|---|---|---|---|---|---|
| AND ONE OFF ITEMS | Jan-Mar | Apr-Jun | Jul-Sep | Jan-Sep | Oct-Dec | Jan-Dec | Jan-Mar | Apr-Jun | Jul-Sep | Jan-Sep |
| Revenue | 15.4 | 26.9 | 29.2 | 71.4 | 31.3 | 102.6 | 18.7 | 4.9 | 0.0 | 23.6 |
| Divested entity (Heppo) | 15.4 | 26.9 | 29.2 | 71.4 | 31.3 | 102.6 | 18.7 | 4.9 | 0.0 | 23.6 |
| Gross Profit | -11.6 | -28.1 | -0.8 | -40.5 | -100.3 | -140.9 | 2.6 | -35.8 | 0.0 | -33.2 |
| Nelly | -14.0 | -33.9 | -6.6 | -54.5 | -106.0 | -160.5 | 0.0 | 0.0 | 0.0 | 0.0 |
| Gymgrossisten | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -4.6 | 0.0 | -4.6 |
| CDON | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -32.0 | 0.0 | -32.0 |
| Divested entity (Heppo) | 2.4 | 5.8 | 5.8 | 14.0 | 5.7 | 19.6 | 2.6 | 0.8 | 0.0 | 3.4 |
| Operating Profit | -19.1 | -44.0 | -10.1 | -73.2 | -117.4 | -190.6 | -3.6 | -42.6 | 0.0 | -46.2 |
| Nelly | -14.0 | -37.7 | -6.6 | -58.3 | -112.2 | -170.5 | 0.0 | 0.0 | 0.0 | 0.0 |
| Gymgrossisten | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -5.6 | 0.0 | -5.6 |
| CDON | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -32.0 | 0.0 | -32.0 |
| Divested entity (Heppo) | -5.1 | -6.3 | -3.5 | -14.9 | -5.2 | -20.1 | -3.6 | -5.0 | 0.0 | -8.6 |
Development per segment
Entertainment*
| 2013 | 2012 | Change | 2013 | 2012 | ||
|---|---|---|---|---|---|---|
| (SEK million) | Jul-Sep | Jul-Sep | (%) | Jan-Sep | Jan-Sep | Change (%) |
| Net sales | 447.1 | 525.0 | -14.8% | 1,370.0 | 1,473.4 | -7.0% |
| Operating profit | -13.0 | 19.6 | - | -9.5 | 55.6 | - |
| Operating margin (%) | -2.9% | 3.7% | -0.7% | 3.8% | ||
| Ingoing inventory balance | 252.3 | 208.5 | 287.1 | 218.7 | ||
| Closing inventory balance | 243.5 | 281.1 | -13.4% | 243.5 | 281.1 | -13.4% |
* Excluding non-recurring costs as reported on page 4
The Entertainment segment comprises the online stores CDON.com and Lekmer.com. Segment sales decreased 15% for the quarter and 7% for the first nine months of the year. Sales excluding currency effects decreased 14% for the quarter and 6% for the first nine months of the year. The segment accounted for 47% (55%) of total Group sales in the quarter and 46% (52%) of total Group sales for the first nine months.
CDON.com is a leading Nordic online retailer with a strong market position. From initially only selling media products, the product offering has gradually been broadened and today includes a wide range from consumer electronics to sports & leisure, clothing & shoes and toys. CDON.com maintained its market position within media products during the quarter, however on a severely declining market. The inventory clearance that was initiated in the second quarter for computer-related products was intensified in the third quarter. The development of new product categories continued in the quarter and sales for each of the new areas was in line with company expectations. CDON.com launched its member program CDON+ in the quarter as an important step in strengthening customer loyalty.
Lekmer.com continued to show solid growth and gained market shares, primarily within the children's clothing and prams/car seats categories.
The segment's result was affected by the on-going clearances intended to reduce capital tied up in stock. The clearance impacted the third quarter's operating result negatively by approximately SEK 13 million, resulting in a slightly positive underlying result.
Fashion*
| 2013 | 2012 | 2013 | 2012 | |||
|---|---|---|---|---|---|---|
| (SEK million) | Jul-Sep | Jul-Sep | Change (%) | Jan-Sep | Jan-Sep | Change (%) |
| Net sales | 187.9 | 164.2 | 14.4% | 632.2 | 544.2 | 16.2% |
| Operating profit | -7.1 | -20.2 | - | -19.9 | -53.1 | - |
| Operating margin (%) | -3.8% | -12.3% | -3.1 | -9.8% | ||
| Ingoing inventory balance | 144.3 | 177.0 | 159.6 | 111.7 | ||
| Closing inventory balance | 183.4 | 235.3 | -22.1% | 183.2 | 235.3 | -22.1% |
* Excluding divested entities and non-recurring costs as reported on page 4
The Fashion segment comprises the online stores Nelly.com and Members.com. Excluding divested businesses, segment sales grew by 14% in the quarter and 16% for the first nine months. Sales excluding currency effects grew by 16% in the quarter and 18% for the first nine months. The segment accounted for 20% (17%) of total Group sales in the quarter and 21% (19%) of total Group sales for the first nine months.
The Fashion segment's continued growth in the third quarter was mainly driven by the Nordic markets and the Netherlands. The growth was somewhat restrained as the summer sale had a larger share of total sales in the period, as well as a delay in the start of autumn season sales due to warm weather.
The Swedish market accounted for 46% of total segment sales in the quarter. Segment sales outside the Nordic countries accounted for 8%; the Netherlands was the largest market outside the Nordics. The segment's product margin was 48% during the quarter, sales of private label products accounted for 32% of total sales.
Nelly.com launched a newly developed web platform and a new graphical interface in the third quarter. The launch provides improved conditions for handling larger sales volumes, simplifying future technical development and opens potential for localized shops, which will strengthen the consumer offering.
The continued stable product margins, in combination with the continued focus on operational streamlining, contributed to improving the operating profit compared with the same period last year.
| 2013 | 2012 Change (%) |
2013 | 2012 | |||
|---|---|---|---|---|---|---|
| (SEK million) | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Change (%) | |
| Net sales | 169.0 | 123.5 | 36.9% | 502.1 | 367.5 | 36.6% |
| Operating profit | 14.8 | 10.6 | 39.6% | 46.3 | 34.9 | 32.7% |
| Operating margin (%) | 8.8% | 8.6% | 9.2% | 9.5% | ||
| Ingoing inventory balance | 80.6 | 59.8 | 63.6 | 47.5 | ||
| Closing inventory balance | 74.9 | 57.9 | 29.3% | 74.9 | 57.9 | 29.3% |
Sports & Health*
* Excluding non-recurring costs as reported on page 4
The Sports & Health segment comprises the online stores Gymgrossisten.com, Bodystore.com and Milebreaker.com. Segment sales grew by 37% in the quarter and for the first nine months. Sales excluding currency effects grew by 36% in the quarter and 37% in the first nine months. The segment accounted for 18% (13%) of total Group sales in the quarter and 17% (13%) of total Group sales in the first nine months.
The segment strengthened its market share in all markets in the period through local marketing activities, such as the production of Gymgrossisten Magazine in Sweden.
The broadening of private label products continued in the period, and an entirely new product line, the premium brand Chained Nutrition, was introduced. Sales of private label products, mainly Star Nutrition, accounted for 46% of total sales. Gymgrossisten.com launched a mobile version of its online store during the
period. The launch was a step forward in the company's strategy to offer customers the best possible service and experience, regardless if they visit a physical store, an e-commerce store or the new mobile-compatible store.
The segment continued to show strong profitability in the quarter. The operating margin was up slightly compared to last year as a result of an increased share of sales from private label products, despite aggressive investments in the new markets.
Home & Garden
| (SEK million) | 2013 | 2012 | Change (%) | 2013 | 2012 | Change (%) | |
|---|---|---|---|---|---|---|---|
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | ||||
| Net sales | 145.5 | 141.6 | 2.7% | 447.5 | 434.0 | 3.1% | |
| Operating profit | -0.8 | -1.3 | - | -4.4 | -10.6 | - | |
| Operating margin (%) | -0.5% | -0.9% | -1.0% | -2.4% | |||
| Ingoing inventory balance | 67.8 | 59.0 | 65.4 | 60.9 | |||
| Closing inventory balance | 67.7 | 67.7 | 0.0% | 67.7 | 67.7 | 0.0% |
The Home & Garden segment comprises the online stores Tretti and Room21. Segment sales increased 3% both in the quarter and in the first nine months. Sales excluding currency effects grew by 3% in the quarter and 4% in the first nine months. The segment accounted for 15% (15%) of total Group sales in the quarter and 15% (15%) of total Group sales in the first nine months.
The share of sales coming from household and home & garden products at Tretti grew in the quarter. The focus on these products is an important step toward a long-term improvement of product margins and a prerequisite for a profitable growth in a market characterised by hard competition within white goods.
Furniture and interior design store Room21 continued to show solid growth, driven partly by successful sales of private label furniture as a complement to design classics, as well as increased brand awareness.
The operating result improved to SEK -0.8 (-1.3) million year-on-year in the quarter, mainly driven by an improved result for Room21.
CDON Group Logistics AB
| (SEK million) | 2013 Jul-Sep |
2012 Jul-Sep |
Change (%) | 2013 Jan-Sep |
2012 Jan-Sep |
Change (%) |
|---|---|---|---|---|---|---|
| Operating profit | -4.9 | - | - | -21.2 | - | - |
CDON Group Logistics AB was founded in the autumn of 2012 when the net assets of the logistics business that operated warehousing for Nelly.com and Lekmer.com at the time were acquired. After the acquisition, the company acted as an independent internal supplier for the Group. As of the third quarter 2013 the logistics company has become an integrated part of each entity where the operational responsibility now lies with each company. During the third quarter, Birgitta Elfversson's position as Head of Logistics for CDON Group was terminated.
The operating loss in the third quarter amounted to SEK -4.9 million. In September the company achieved its goal of a break-even operating result and the logistics company is expected to maintain this going forward. The company is consolidated into the accounts of the Group's central functions.
Parent Company
The parent company CDON Group AB reported sales of SEK 10.9 (12.4) million for the quarter. Cash and cash equivalents in the parent company amounted to SEK 157.0 (-10.3) million at the end of the period. The parent company's investments in non-current assets during the quarter correspond to the acquisition of outstanding minority shares in NLY Scandinavia AB.
Accounting policies
This report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The interim report for the parent company has been prepared in accordance with the Annual Accounts Act. The accounting policies in the Group's consolidated financial statements and the parent company's financial statements have been prepared according to the same accounting policies and calculation methods as the 2012 annual accounts.
Risks and uncertainties
Several factors could affect CDON Group's earnings and operations, most of which can be managed through internal procedures but some of which are controlled by external factors. Risks and uncertainties include IT and control systems, suppliers, seasonal variations and currencies, new market entries, changes in market conditions, and changes in e-commerce spending behaviour. The parent company is also subject interest rate risks. The 2012 annual report contains a more comprehensive description of the risks and uncertainty factors affecting the Group in the management report and in Note 20.
Transactions with related parties
Related party transactions for the parent company and the Group are presently of the same character, but less extensive, than described in the 2012 annual report and in the 2013 prospectus for the rights issue.
Other information
2014 Annual General Meeting of shareholders
CDON Group's 2014 annual general meeting of shareholders will be held on 13 May 2014 in Stockholm. Shareholders that would like to have a matter addressed at the Annual General Meeting should shall send a request in writing to [email protected] or to the Company Secretary, CDON Group AB (publ), Box 385, SE-201 23 Malmö, Sweden. To be certain that a matter can be included in the notice of the Annual General Meeting, the request must have been received at least seven weeks before the Annual General Meeting. Further details on how and when to give notice to attend will be published in advance of the Annual General Meeting.
Nomination Committee for the 2014 Annual General Meeting of shareholders
In accordance with the resolution of the 2013 Annual General Meeting, Cristina Stenbeck, as the representative of the largest shareholder Investment AB Kinnevik, has convened a Nomination Committee consisting of members appointed by the largest shareholders in CDON Group. The Nomination Committee is comprised of Cristina Stenbeck appointed by Investment AB Kinnevik, Annika Andersson appointed by Swedbank Robur funds and Frank Larsson appointed by Handelsbanken Fonder AB. The members of the Committee shall appoint the Committee Chairman at their first meeting. Information about the work of the nomination committee can be found on CDON Group's website at www.cdongroup.com.
CDON Alandia
Finnish customs authorities are investigating a subsidiary of CDON AB, Åland-based CDON Alandia, for suspicion of tax fraud. Like other companies, CDON.com has chosen to serve its Finnish customers from Åland. The company has been in operation since 2007 and has been fully transparent for relevant authorities, who have routinely reviewed it, most recently as part of a customs reviewing 2010 and a tax review in 2012. CDON AB is fully assisting in the investigation, and is still of the opinion that the company acts in accordance with relevant laws and regulations.
Fourth Quarter and Full Year 2013 Financial Results
CDON Group's results for the fourth quarter and full year ending 31 December 2013 will be published on 4 February 2014.
21 October 2013
Paul Fischbein President & CEO
CDON Group AB (publ.) Bergsgatan 20 Box 385 SE-201 23 Malmö Corporate ID number: 556035-6940
The company will host a conference call today at 13.00 Stockholm time, 12.00 London time and 7.00 New York time.
To participate in a conference call, please dial:
| Sweden: | +46(0)8 5853 6965 |
|---|---|
| International: | +44(0)20 7136 2054 |
| US: | +1 212 444 0481 |
The pin code to access this call is 6930192. To listen to the conference call online, please go to www.cdongroup.com.
***
For additional information, please visit www.cdongroup.com or contact: Paul Fischbein, President & Chief Executive Officer Phone: +46 (0) 10 703 20 00
Press, investor and analyst enquiries: Fredrik Bengtsson, Head of Communications Phone: +46 (0) 700 80 75 04 E-mail: [email protected], [email protected]
About CDON Group
CDON Group is the leading e-commerce group in the Nordic region. Established in 1999, the Group has continuously expanded its product portfolio and is now a leading e-commerce player in the Entertainment (CDON.com and Lekmer.com), Fashion (Nelly.com and Members.com), Sports & Health (Gymgrossisten.com, Bodystore.com and Milebreaker.com) and Home & Garden (Tretti.com and Room21.com) segments. CDON Group's online stores attracted approximately 244 million site visits and two million unique customers in 2012.
The information in this announcement is that which CDON Group AB is required to disclose under the Securities Markets Act. This information was released for publication at 08.00 CET 21 October 2013.
Auditors' Review Report concerning this interim report
To the Board of Directors of CDON Group AB (publ) Org nr 556035-6940
Introduction
We have reviewed the interim report for CDON Group AB (publ) as of September 30, 2013 and the nine month period ending on this date. The Board of Directors and the President and CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review. This interim report has been published in Swedish and English. In the event of any discrepancy in content between the Swedish original text and the English translation, the Swedish original shall prevail.
The focus and scope of the review
We conducted our review in accordance with the Standard on Review Engagements (SÖG) 2410, Review of the Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, performing an analytical examination and applying other review procedures. A review has a different focus and is substantially less in scope than an audit conducted according to ISA and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Accordingly, the conclusion expressed based on a review does not constitute the same level of assurance as a conclusion based on an audit.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim report, in all material respects, is not prepared for the Group in accordance with IAS 34 and the Swedish Annual Accounts Act and for the Parent Company in accordance with the Swedish Annual Accounts Act.
Stockholm, 21 October 2013
KPMG AB
Cronie Wallquist Authorized Public Accountant
| CONDENSED CONSOLIDATED | 2013 | 2012 | 2013 | 2012 | 2012 |
|---|---|---|---|---|---|
| INCOME STATEMENT (SEK million) | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Jan-Dec |
| Net sales | |||||
| Cost of goods and services | 949.6 -832.6 |
982.5 -853.8 |
2,969.9 -2,589.2 |
2,888.9 -2,515.7 |
4,461.7 -3,990.5 |
| Gross profit | 117.0 | 128.6 | 380.6 | 373.2 | 471.2 |
| Sales and administration expenses | -135.7 | -137.7 | -451.4 | -435.7 | -638.0 |
| Other operating income and expenses, net | 0.7 | 1.5 | -3.8 | -0.7 | -7.2 |
| Operating profit | -17.9 | -7.6 | -74.6 | -63.2 | -173.9 |
| Net interest & other financial items | -6.3 | -8.8 | -28.0 | -19.2 | -27.3 |
| Profit before tax | -24.3 | -16.4 | -102.6 | -82.4 | -201.2 |
| Tax | |||||
| Net income for the period | 3.2 -21.1 |
5.1 -11.3 |
19.5 -83.1 |
21.0 -61.4 |
49.4 -151.7 |
| EBITDA | -12.7 | -3.4 | -59.1 | -52.2 | -158.2 |
| Attributable to: | |||||
| Equity holders of the parent | -21.0 | -10.4 | -82.2 | -58.1 | -149.6 |
| Non-controlling interests | 0.0 | -0.8 | -0.9 | -3.3 | -2.2 |
| Net income for the period | -21.1 | -11.3 | -83.1 | -61.4 | -151.7 |
| Basic earnings per share (SEK)* | |||||
| Diluted earnings per share (SEK)* | -0.21 | -0.16 | -1.03 | -0.88 | -2.25 |
| -0.21 | -0.16 | -1.03 | -0.88 | -2.25 |
* Basic earnings per share for Jul-Sep 2013 and Jan-Sep 2013 have been calculated to reflect completed new share issue by w hich the number of outstanding shares increased from 66,342,124 to 99,513,183 before dilution and from 72,921,071 to 107,577,702 after dilution.
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME CONDENSED (SEK million) |
2013 Jul-Sep |
2012 Jul-Sep |
2013 Jan-Sep |
2012 Jan-Sep |
2012 Jan-Dec |
|---|---|---|---|---|---|
| Profit for the period | -21.1 | -11.3 | -83.1 | -61.4 | -151.7 |
| Other comprehensive income | |||||
| Items that may be reclassified subsequently to profit or loss: |
|||||
| Translation difference for the period | -0.5 | -1.7 | 0.0 | -2.0 | -1.2 |
| Other comprehensive income for the period | -0.5 | -1.7 | 0.0 | -2.0 | -1.2 |
| Total comprehensive income for period | -21.5 | -12.9 | -83.1 | -63.3 | -152.9 |
| Total comprehensive income attributable to: | |||||
| Parent company shareholders | -21.5 | -12.1 | -82.1 | -60.0 | -150.7 |
| Non-controlling interests | 0.0 | -0.8 | -0.9 | -3.3 | -2.2 |
| Total comprehensive income for the period | -21.5 | -12.9 | -83.1 | -63.3 | -152.9 |
| Shares outstanding at period's end | 99,513,186 | 66,342,124 | 99,513,186 | 66,342,124 | 66,342,124 |
|---|---|---|---|---|---|
| Shares outstanding at period's end, incl convertible | 107,577,702 | 72,921,071 | 107,577,702 | 72,921,071 | 72,921,071 |
| Average number of shares, basic | 99,513,186 | 66,342,124 | 79,455,940 | 66,342,124 | 66,342,124 |
| Average number of shares, incl convertible | 107,577,702 | 72,921,071 | 86,622,584 | 72,921,071 | 72,921,071 |
| CONSOLIDATED STATEMENT OF FINANCIAL | 2013 | 2012 | 2012 |
|---|---|---|---|
| POSITION CONDENSED (SEK million) | 30-Sep | 30-Sep | 31-Dec |
| Non-current assets | |||
| Goodw ill | 462.0 | 445.8 | 461.8 |
| Other intangible assets | 166.8 | 155.9 | 156.5 |
| Total intangible assets | 628.8 | 601.6 | 618.3 |
| Financial non-current assets | 1.6 | 1.6 | 1.6 |
| Tangible non-current assets | 19.3 | 8.0 | 14.3 |
| Deferred tax asset | 73.6 | 6.0 | 44.4 |
| Total non-current assets | 723.2 | 617.2 | 678.5 |
| Current assets | |||
| Inventories | 569.5 | 682.9 | 609.7 |
| Current non-interest-bearing receivables | 170.9 | 173.2 | 268.5 |
| Total receivables | 170.9 | 173.2 | 268.5 |
| Cash and cash equivalents | 163.8 | 9.0 | 126.1 |
| Total current assets | 904.1 | 865.1 | 1,004.3 |
| Total assets | 1,627.4 | 1,482.3 | 1,682.8 |
| Equity | |||
| Equity attributable to ow ners of the parent | 672.0 | 356.4 | 267.1 |
| Non-controlling interest | 1.4 | -1.9 | -0.7 |
| Total equity | 673.3 | 354.5 | 266.4 |
| Non-current liabilities Non interest bearing |
|||
| Deferred tax liability | |||
| Other provisions | 29.2 | 38.9 | 30.9 |
| 1.4 | 5.1 | 6.0 | |
| Interest bearing | |||
| Long term loans | 0.0 | 150.0 | 0.0 |
| Convertible bond | 229.4 | 220.9 | 223.0 |
| Total non-current liabilities | 260.0 | 414.9 | 259.8 |
| Current liabilities | |||
| Short term interest bearing loans | 0.0 | 0.0 | 150.0 |
| Current interest-bearing liabilities | 15.0 | 15.0 | 15.0 |
| Current non-interest-bearing liabilities | 679.0 | 697.9 | 991.6 |
| Total current liabilities | 694.0 | 712.9 | 1,156.6 |
| Total equity and liabilities | 1,627.4 | 1,482.3 | 1,682.8 |
The carrying amounts are considered to be reasonable approximations of fair value for all financial assets and financial liabilities, except for the convertible debt. Fair value of the convertible debt is estimated to be SEK 245.1 million as of September 30, 2013. Fair value of the convertible debt w as estimated to be SEK 245.5 million as of 31 December 2012.
| CONSOLIDATED STATEMENT OF CASH FLOWS | 2013 | 2012 | 2013 | 2012 | 2012 |
|---|---|---|---|---|---|
| CONDENSED (SEK million) | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Jan-Dec |
| Cash flow from operating activities | -15.2 | 1.2 | -83.6 | -81.7 | -97.5 |
| Changes in w orking capital | 29.8 | -93.6 | -193.0 | -291.2 | -135.1 |
| Cash flow from operations | 14.6 | -92.4 | -276.6 | -372.9 | -232.6 |
| Investments in subsidiaries* | -5.0 | 0.0 | -15.6 | -4.9 | -14.9 |
| Investments in other non-current assets | -11.8 | -6.1 | -32.5 | -27.9 | -42.5 |
| Divested operations** | 5.4 | 0.0 | 26.8 | 0.0 | 0.0 |
| Other cash flow from investing activities | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Cash flow to/from investing activities | -11.4 | -6.1 | -21.3 | -32.7 | -57.3 |
| Shareholder dividends and share buy-backs | -1.4 | 0.0 | -1.4 | 0.0 | 0.0 |
| Acquisition of shares from non controlling interest | -13.9 | 0.0 | -13.9 | 0.0 | 0.0 |
| New share issue | -0.8 | 0.0 | 501.4 | 0.0 | 0.0 |
| Issue of credit facilities | 0.0 | 0.0 | 150.0 | 0.0 | 0.0 |
| Amortisation of credit facilities | -150.0 | 0.0 | -300.0 | 0.0 | 0.0 |
| Cash flow to/from financing activities | -166.2 | 0.0 | 336.0 | 0.0 | 0.0 |
| Change in cash and cash equivalents for the period | -163.0 | -98.5 | 38.2 | -405.7 | -289.9 |
| Cash and cash equivalents at period's start | |||||
| Translation difference, cash and cash equivalents | 327.2 | 110.4 | 126.1 | 417.4 | 417.4 |
| -0.5 | -2.9 | -0.5 | -2.7 | -1.4 | |
| Cash and cash equivalents at period's end | 163.8 | 9.0 | 163.8 | 9.0 | 126.1 |
* Investments in subsidiaries Jan-Sep 2013 comprises SEK 9.0 million acquisition of Business Linc BL AB's operations, SEK 4.6 million acquisition of Lekmer AB and SEK 2.0 million acquisition of Rum21 AB.
** Divested operations Jan-Sep 2013 comprises the tw o first installments of SEK 26.8 million on disposal of Heppo AB's operations.
| STATEMENT OF CHANGES IN EQUITY | 2013 | 2012 | 2012 |
|---|---|---|---|
| CONDENSED (SEK million) | 30-Sep | 30-Sep | 31-Dec |
| Opening balance | 266.4 | 417.3 | 417.3 |
| Comprehensive income for the period | -83.1 | -63.3 | -152.9 |
| Effects of long term incentive program | 0.8 | 0.6 | 0.9 |
| New share issue* | 504.5 | 0.6 | 0.6 |
| Repurchased ow n shares | -1.4 | -0.6 | -0.6 |
| Acquisition of shares from non-controlling interests w ithout a change in control | -13.9 | - | - |
| Effect of change in tax rate on convertible | - | - | 1.2 |
| Closing balance | 673.3 | 354.5 | 266.4 |
* Transaction costs of approximately SEK 14.2 million (SEK 11.1 million net of tax) directly attributable to the issue of new ordinary shares are recognized, net of tax, in equity as a deduction from the proceeds.
| NET SALES (SEK million) |
2012 Jan-Mar |
2012 Apr-Jun |
2012 Jul-Sep |
2012 Jan-Sep |
2012 Oct-Dec |
2012 Full year |
2013 Jan-Mar |
2013 Apr-Jun |
2013 Jul-Sep |
2013 Jan-Sep |
|---|---|---|---|---|---|---|---|---|---|---|
| Entertainment | 484.3 | 464.1 | 525.0 | 1,473.4 | 912.7 | 2,386.0 | 512.4 | 410.5 | 447.1 | 1,370.0 |
| Fashion | 196.4 | 225.9 | 193.3 | 615.6 | 327.3 | 942.9 | 223.8 | 244.1 | 187.9 | 655.8 |
| Sport & Health | 127.6 | 116.4 | 123.5 | 367.5 | 128.9 | 496.4 | 176.8 | 156.3 | 169.0 | 502.1 |
| Home & Garden | 146.3 | 146.1 | 141.6 | 434.0 | 197.5 | 631.6 | 143.2 | 158.8 | 145.5 | 447.5 |
| Total operational business areas | 954.6 | 952.5 | 983.4 | 2,890.5 | 1,566.4 | 4,456.9 | 1,056.1 | 969.7 | 949.5 | 2,975.4 |
| Group central operations | 13.4 | 14.5 | 12.4 | 40.4 | 60.7 | 101.1 | 42.7 | 46.9 | 40.5 | 130.1 |
| Eliminations | -13.7 | -14.9 | -13.4 | -41.9 | -54.3 | -96.2 | -47.8 | -47.4 | -40.4 | -135.6 |
| CONSOLIDATED TOTAL | 954.3 | 952.1 | 982.5 | 2,888.9 | 1,572.8 | 4,461.7 | 1,051.1 | 969.2 | 949.6 | 2,969.9 |
| Intersegment sales Entertainment |
- | - | 0.0 | 0.0 | 0.5 | 0.5 | 8.5 | 0.8 | 0.1 | 9.5 |
| Fashion | - | - | - | - | - | - | - | 0.0 | 0.0 | 0.0 |
| Sport & Health | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Home & Garden | 0.2 | 0.4 | 0.9 | 1.5 | 0.6 | 2.1 | 0.0 | 0.0 | 0.0 | 0.0 |
| Group central operations | 13.4 | 14.5 | 12.4 | 40.4 | 53.2 | 93.6 | 39.2 | 46.6 | 40.3 | 126.1 |
| Total | 13.7 | 14.9 | 13.4 | 41.9 | 54.3 | 96.2 | 47.8 | 47.4 | 40.4 | 135.6 |
| OPERATING PROFIT (SEK million) |
2012 Jan-Mar |
2012 Apr-Jun |
2012 Jul-Sep |
2012 Jan-Sep |
2012 Oct-Dec |
2012 Full year |
2013 Jan-Mar |
2013 Apr-Jun |
2013 Jul-Sep |
2013 Jan-Sep |
| Entertainment | 24.1 | 11.8 | 19.6 | 55.6 | 46.8 | 102.3 | 13.3 | -41.9 | -13.0 | -41.5 |
| Fashion | -38.5 | -57.5 | -30.3 | -126.3 | -141.3 | -267.6 | -17.4 | -4.0 | -7.1 | -28.5 |
| Sport & Health | 13.3 | 10.9 | 10.6 | 34.9 | 12.4 | 47.3 | 17.9 | 8.0 | 14.8 | 40.7 |
| Home & Garden Total operational business areas |
-5.9 | -3.4 | -1.3 | -10.6 | -3.1 | -13.7 | -3.4 | -0.2 | -0.8 | -4.4 |
| Group central operations | -7.0 | -38.2 | -1.3 | -46.5 | -85.2 | -131.6 | 10.3 | -38.1 | -6.0 | -33.8 |
| Of which CDON Group Logistics AB | -5.1 - |
-5.3 - |
-6.3 - |
-16.7 - |
-25.5 -19.4 |
-42.2 -19.4 |
-18.1 -12.1 |
-10.8 -4.3 |
-11.9 -4.9 |
-40.8 -21.2 |
| CONSOLIDATED TOTAL | -12.1 | -43.5 | -7.6 | -63.2 | -110.7 | -173.9 | -7.8 | -48.9 | -17.9 | -74.6 |
| PROFIT BEFORE TAX (SEK million) |
2012 Jan-Mar |
2012 Apr-Jun |
2012 Jul-Sep |
2012 Jan-Sep |
2012 Oct-Dec |
2012 Full year |
2013 Jan-Mar |
2013 Apr-Jun |
2013 Jul-Sep |
2013 Jan-Sep |
| Entertainment | 23.6 | 11.7 | 17.9 | 53.2 | 46.1 | 99.3 | 10.8 | -43.2 | -15.9 | -48.3 |
| Fashion | -40.5 | -58.8 | -33.8 | -133.0 | -144.1 | -277.1 | -22.9 | -5.8 | -9.7 | -38.3 |
| Sport & Health | 13.4 | 11.0 | 9.1 | 33.5 | 13.2 | 46.7 | 17.2 | 8.7 | 14.4 | 40.2 |
| Home & Garden Total operational business areas |
-6.0 -9.4 |
-3.4 -39.5 |
-1.4 -8.1 |
-10.8 -57.1 |
-3.2 -88.0 |
-14.1 -145.1 |
-3.8 1.4 |
-0.6 -40.9 |
-1.1 -12.3 |
-5.5 -51.8 |
| Group central operations | -8.1 | -8.9 | -8.3 | -25.3 | -30.8 | -56.0 | -21.4 | -17.3 | -12.0 | -50.7 |
| Of which CDON Group Logistics AB | - | - | - | - | -19.5 | -19.5 | -12.5 | -4.8 | -5.4 | -22.6 |
| CONSOLIDATED TOTAL | -17.5 | -48.5 | -16.4 | -82.4 | -118.8 | -201.2 | -20.1 | -58.2 | -24.3 | -102.6 |
| INVENTORIES (SEK million) |
2012 31-Mar |
2012 30-Jun |
2012 30-Sep |
2012 31-Dec |
2013 31-Mar |
2013 30-Jun |
2013 30-Sep |
|||
| Entertainment | 221.2 | 208.5 | 281.1 | 287.1 | 259.0 | 252.3 | 243.5 | |||
| Fashion | 175.2 | 205.3 | 276.2 | 193.6 | 238.4 | 149.3 | 183.4 | |||
| Sport & Health | 48.6 | 59.8 | 57.9 | 63.6 | 57.9 | 80.6 | 74.9 | |||
| Home & Garden | 64.6 | 59.0 | 67.7 | 65.4 | 88.6 | 67.8 | 67.7 | |||
| Total operational business areas | 509.6 | 532.6 | 682.9 | 609.7 | 643.9 | 550.1 | 569.5 | |||
| Group central operations | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||
| CONSOLIDATED TOTAL | 509.6 | 532.6 | 682.9 | 609.7 | 643.9 | 550.1 | 569.5 |
| PARENT COMPANY INCOME STATEMENT | 2013 | 2012 | 2013 | 2012 | 2012 |
|---|---|---|---|---|---|
| CONDENSED (SEK million) | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Jan-Dec |
| Net Sales | 10.9 | 12.4 | 38.0 | 40.4 | 54.0 |
| Gross profit | 10.9 | 12.4 | 38.0 | 40.4 | 54.0 |
| Administration expenses | -17.9 | -18.7 | -57.6 | -57.0 | -76.9 |
| Operating profit | -7.0 | -6.3 | -19.6 | -16.7 | -22.8 |
| Net interest & other financial items | 0.4 | -2.0 | -8.5 | -8.6 | -13.7 |
| Group contribution received | 0.0 | 0.0 | 0.0 | 0.0 | 148.2 |
| Group contribution paid | 0.0 | 0.0 | 0.0 | 0.0 | -120.4 |
| Change in excess depreciation | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Profit before tax | -6.6 | -8.3 | -28.1 | -25.3 | -8.7 |
| Tax | 1.5 | 2.2 | 6.1 | 6.7 | 2.3 |
| Net income for the period | -5.1 | -6.1 | -22.0 | -18.6 | -6.4 |
| PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME | |||||
| CONDENSED (SEK million) | |||||
| Profit for period | -5.1 | -6.1 | -22.0 | -18.6 | -6.4 |
| Other comprehensive income | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total comprehensive income for period | -5.1 | -6.1 | -22.0 | -18.6 | -6.4 |
| PARENT COMPANY STATEMENT OF FINANCIAL POSITION | 2013 | 2012 | 2012 |
|---|---|---|---|
| CONDENSED (SEK million) | 30-Sep | 30-Sep | 31-Dec |
| Non-current assets | |||
| Other intangible assets | 0.1 | 0.0 | 0.0 |
| Shares and participating interests | 832.6 | 684.3 | 818.2 |
| Equipment | 0.2 | 0.0 | 0.0 |
| Deferred tax asset | 4.7 | 0.0 | 0.0 |
| Total non-current assets | 837.6 | 684.3 | 818.3 |
| Current assets | |||
| Current interest-bearing receivables | 254.3 | 316.1 | 370.0 |
| Current non-interest-bearing receivables | 5.9 | 142.9 | 156.1 |
| Cash and cash equivalents | 157.0 | -10.3 | 87.7 |
| Total current assets | 417.2 | 448.7 | 613.8 |
| Total assets | 1,254.8 | 1,133.1 | 1,432.0 |
| Equity | |||
| Restricted equity | 202.2 | 134.4 | 134.4 |
| Unrestricted equity | 681.1 | 253.3 | 266.9 |
| Total equity | 883.2 | 387.7 | 401.3 |
| Non-current liabilities | |||
| Convertible bonds | |||
| Interest-bearing liabilities | 229.4 0.0 |
220.9 150.0 |
223.0 0.0 |
| Deferred tax liability | 4.5 | 7.7 | 6.0 |
| Provisions | 1.4 | 5.1 | 1.0 |
| Total non-current liabilities | 235.3 | 383.6 | 229.9 |
| Current liabilities | |||
| Short term interest bearing loans | 0.0 | 0.0 | 150.0 |
| Other interest-bearing liabilities | 89.7 | 329.0 | 360.3 |
| Non-interest-bearing liabilities | 46.5 | 32.7 | 290.6 |
| Total current liabilities | 136.2 | 361.7 | 800.8 |
| Total equity and liabilities | 1,254.8 | 1,133.1 | 1,432.0 |
| KEY RATIOS | 2012 | 2012 | 2012 | 2012 | 2012 | 2012 | 2013 | 2013 | 2013 | 2013 |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan-Mar | Apr-Jun | Jul-Sep | Jan-Sep | Oct-Dec | Full year | Jan-Mar | Apr-Jun | Jul-Sep | Jan-Sep | |
| GROUP | ||||||||||
| Sales grow th (%) | 66.9 | 38.2 | 18.9 | 38.4 | 19.5 | 31.1 | 10.1 | 1.8 | -3.3 | 2.8 |
| Change in operating expenses (%) | 63.4 | 39.3 | 31.0 | 43.6 | 30.3 | 39.1 | 5.7 | 6.2 | -1.5 | 3.6 |
| Operating margin (%) | -1.3 | -4.6 | -0.8 | -2.2 | -7.0 | -3.9 | -0.7 | -5.0 | -1.9 | -2.5 |
| Gross profit margin (%) | 14.2 | 11.4 | 13.1 | 12.9 | 6.2 | 10.6 | 14.1 | 11.9 | 12.3 | 12.8 |
| Return on capital employed (%) | 13.1 | 4.4 | 1.1 | 1.1 | neg | neg | neg | neg | neg | neg |
| Return on equity (%) | 15.0 | 3.2 | neg | neg | neg | neg | neg | neg | neg | neg |
| Equity/assets ratio (%) | 28.1 | 25.9 | 23.9 | 23.9 | 15.8 | 15.8 | 15.9 | 40.5 | 41.4 | 41.4 |
| Net debt (SEK million) | 196.1 | 258.4 | 361.8 | 361.8 | 246.8 | 246.8 | 590.3 | 50.0 | 65.7 | 65.7 |
| Cash flow s from operations (SEK million) | -234.5 | -46.0 | -92.4 | -372.9 | 133.4 | -239.6 | -327.1 | 36.0 | 14.6 | -276.6 |
| Earnings per share (SEK)* | -0.18 | -0.54 | -0.16 | -0.88 | -1.38 | -2.25 | -0.25 | -0.62 | -0.21 | -1.03 |
| Equity per share (SEK)** | 6.09 | 5.53 | 5.34 | 5.34 | 4.02 | 4.02 | 3.74 | 7.12 | 6.78 | 6.78 |
| Depreciation/Net sales (%) | 0.3 | 0.4 | 0.4 | 0.4 | 0.3 | 0.4 | 0.5 | 0.5 | 0.5 | 0.5 |
| Capital Expenditure/Net sales (%) | 1.3 | 1.0 | 0.6 | 1.0 | 0.9 | 1.0 | 0.7 | 1.4 | 1.2 | 1.1 |
| No. of visits (thousand) | 58,679 | 54,532 | 53,332 | 166,542 | 77,802 | 244,344 | 64,394 | 58,926 | 52,294 | 175,615 |
| No. of orders (thousand) | 1,579 | 1,437 | 1,553 | 4,570 | 2,527 | 7,096 | 1,710 | 1,533 | 1,482 | 4,726 |
| Average shopping basket (SEK) | 581 | 643 | 611 | 611 | 590 | 603 | 618 | 633 | 640 | 630 |
| Entertainment | ||||||||||
| No. of visits (thousand) | 22,305 | 19,565 | 21,830 | 63,699 | 35,472 | 99,172 | 25,938 | 22,083 | 23,167 | 71,188 |
| No. of orders (thousand) | 1,048 | 868 | 1,039 | 2,955 | 1,748 | 4,702 | 1,089 | 904 | 954 | 2,948 |
| Average shopping basket (SEK) | 436 | 508 | 482 | 474 | 491 | 480 | 470 | 454 | 469 | 465 |
| Fashion | ||||||||||
| No. of visits (thousand) | 30,292 | 29,292 | 25,663 | 85,247 | 35,077 | 120,324 | 30,361 | 29,280 | 21,848 | 81,488 |
| No. of orders (thousand) | 296 | 356 | 292 | 944 | 514 | 1,459 | 323 | 352 | 262 | 938 |
| Average shopping basket (SEK) | 644 | 628 | 641 | 637 | 606 | 626 | 692 | 693 | 716 | 699 |
| Sport & Health | ||||||||||
| No. of visits (thousand) | 3,497 | 2,979 | 3,000 | 9,475 | 3,477 | 12,953 | 4,805 | 4,112 | 3,854 | 12,772 |
| No. of orders (thousand) | 180 | 158 | 164 | 502 | 173 | 676 | 237 | 214 | 209 | 661 |
| Average shopping basket (SEK) | 703 | 733 | 745 | 726 | 737 | 729 | 745 | 731 | 807 | 760 |
| Home & Garden | ||||||||||
| No. of visits (thousand) | 2,585 | 2,696 | 2,839 | 8,121 | 3,775 | 11,896 | 3,291 | 3,451 | 3,425 | 10,167 |
| No. of orders (thousand) | 56 | 55 | 58 | 169 | 91 | 259 | 60 | 63 | 57 | 179 |
| Average shopping basket (SEK) | 2,574 | 2,625 | 2,380 | 2,424 | 2,120 | 2,383 | 2,385 | 2,528 | 2,568 | 2,493 |
* Earnings per share for the periods Jan-Dec 2012 and Jan-Sep 2013 have been calculated on the average number of outstanding shares for the periods. The w eighted average number of shares for the full year 2012 is 66,342,124. For the period Jul-Sep 2013 w eighted average number of shares amounts to 99,513,186 and for the period Jan-Sep 2013 w eighted average number of shares amounts to 79,455,940.
** Calculated on present number of shares, as per September 2013, amounting to 99,513,186.
Definitions
No. of visits Return on equity Return on capital employed
Gross profit margin Equity/assets ratio Net debt (+) / Net cash (-) Gross profit as a percentage of net sales. Gross profit includes costs directly attributable to the goods sold, fulfillment costs, and shipping costs. Equity plus non-controlling interests as a percentage of total assets. Interest-bearing liabilities less interest-bearing current and non-current assets and cash and cash equivalents.
Earnings for the year attributable to the parent company's shareholders divided by average number of shares.
Gross number of visits to the Groups online stores.
Net income for the last four quarters as a percentage of average equity for the last four quarters. Operating income for the last four quarters as a percentage of average of total non-current assets, cash and cash equivalents, and net
w orking capital reduced for provisions, for the last four quarters
Earnings per share Equity per share Capital Expenditure/Net Sales
Equity attributable to the parent company's shareholders divided by average number of shares. Investments in tangible non-current assets divided by Net sales for the period.
Note 1
CDON Group AB announced that the company has entered into an agreement to sell the operations of subsidiary Heppo AB to Footw ay Group AB.
The transaction w as made through an asset deal and included the majority of Heppo AB's assets, as w ell as the liabilities attributable thereto. Heppo AB w as part of the Group's fashion segment and reported total net sales of approximately SEK 103 million and an operating result of approximately SEK -20 million in 2012. The purchase price amounted to SEK 42.9 million, of w hich SEK 26.8 million has been received as per 30 September 2013, and the remainder w ill be received as three instalments betw een December 2013 and June 2014. The transaction w as closed on 18 April and affected second quarter earnings w ith approximately SEK -3 million.
| RESULT FROM DIVESTED OPERATIONS | 2013 | 2012 |
|---|---|---|
| (SEK million) | Jan-Sep | Jan-Sep |
| Net sales | 23.6 | 71.4 |
| Expenses | -31.2 | -86.9 |
| Profit before tax | -7.6 | -15.6 |
| Tax | 2.0 | 4.1 |
| Profit after tax but before capital gain/loss from divested operations | -5.5 | -11.5 |
| Capital gain/loss from divested operations | -2.5 | - |
| Tax attributable to the above capital gain/loss | 0.5 | - |
| Capital gain/loss after tax | -1.9 | - |
| Total income for the period | -7.5 | - |
| Net cash flow from divested operations | ||
| Cash flow from operations | -15.3 | -1.0 |
| Cash flow to/from investing activities | 26.8 | -0.4 |
| Cash flow to/from financing activities | 0.0 | 1.0 |
| Net cash flow from divested operations | 11.4 | -0.4 |
| DIVESTED ASSETS AND LIABILITIES FROM HEPPO AB'S OPERATIONS | Recognised | |
| (SEK million) | values |
| (SEK million) | values |
|---|---|
| Tangible non-current assets | -0.3 |
| Inventories | -42.2 |
| Net identifiable assets and liabilities | -42.6 |
| Purchase price | 42.9 |
| Deferred purchase price | -16.1 |
| Net cash flow | 26.8 |
Deferred purchase price
The purchase price amounts to SEK 42.9 million, half of w hich w as received as a cash consideration at closing, and the remainder received as four instalments betw een September 2013 and June 2014.
| SUMMARY DEVELOPMENT OF DIVESTED OPERATIONS (SEK million) |
2012 Jan-Mar |
2012 Apr-Jun |
2012 Jul-Sep |
2012 Oct-Dec |
2013 Jan-Mar |
2013 Apr-Jun |
2013 Jul-Sep |
|---|---|---|---|---|---|---|---|
| Net sales | 15.4 | 26.9 | 29.2 | 31.3 | 18.7 | 4.9 | 0.0 |
| Operating profit | -5.1 | -6.3 | -3.5 | -5.2 | -3.6 | -5.0 | 0.0 |
| Closing inventory balance | 29.0 | 28.3 | 40.9 | 34.0 | 47.7 | 5.0 | 0.0 |